“Strategic direction is more important today. It's about providing a framework for managers to navigate through the fog of complex chokes. No company can avoid this."

– C.K. Prahalad –

Case 5: Reaching for the stars!

Client: A North American speciality pharmaceutical company in India. Leader in ophthalmology, the company operates a nation-wide distribution channel supplying eye care, neuromuscular pharmaceutical, surgical, and optical products. Pharmaceutical products are manufactured in a state-of-the-art facility in India; other products are imported from overseas plants.

Background: In India, the company has been marketing a prescription drug for the last ten years. Though the business has been growing at nearly 40% per annum, the company believes the growth potential of the drug is much higher. The product is the undisputed market leader and enjoys unparalleled brand equity worldwide.

The high value drug, administered by intra-muscular injection, requires a high degree of skill for effective administration. The company has been following a broad based strategy to promote the product’s usage among doctors. This approach has yielded 40% CAGR which is now considered sub-optimal.

Task: To help the client grow the business at 70-100% annually for the next three years. The company requires help to formulate and execute the drug’s business and marketing strategies.

Conceptual Foundation and Methodology: Two principal concepts form the foundations of this project. ‘Focus’ the generic strategy proposed by Michael Porter, and Value Net a game theoretic model of strategy suggested by Nalebluff and Brandenburger have been used in conjunction.

Focus: The Company has been encouraged to discard the shotgun and adopt the rifle shot approach to marketing. The Company will promote the use of their drug for the treatment of certain ailments only and doctors who treat these conditions. Being a high value drug, only doctors who charge above a certain threshold will be considered for training. Unlike in the past, the company will focus on large and prosperous towns.

The Value Net has been employed to prepare the framework for business strategy and rigorously test new strategies. Proposed actions will be evaluated on the basis of specific value being delivered to customers, principally doctors who inject. The Value Net is being used to explore how effective inter-disciplinary teams of doctors can successfully treat patients. The roles of sales personnel are also being recast. They will now be required to focus on activities that create specific value for accounts (doctors) assigned to them.

Consultancy and mentoring are being used to help the team formulate, test and execute strategies for this promising product.

Result: The business strategy has been formulated and approved in principle by the higher management of the Australasia Region. Product discounts (up to 50% in some cases) have been withdrawn. Marketing strategy, being shaped at present, will focus on creating awareness among doctors, patients and their families. Sharper customer (doctors) profiling will dictate new and more effective communication and brand promotion strategies. It will determine customer engagement, sales force re-organisation, and performance management of sales specialists. Review of implementation will follow.

The project began in November 2004 ended in October 2005.